Key Elements of Effective FCPA Remediation: Earning DOJ and SEC's 'High Premium'

It is not just the organization that is impacted by issues arising from poor internal controls. Board members and senior management face substantial embarrassment and damaged personal reputations. Consider also the career damage to business leaders, ethics and compliance officers and internal auditors.

Effective FCPA remediation adds to the bottom line and should pay for itself many times over. According to a survey conducted by the Economist Intelligence Unit, corporations on average lose 2% of earnings to fraud and corruption, or the equivalent of a full week's work. Roughly 20% of companies lose over 4% of earnings, or the equivalent of two weeks' work, and a quarter of those lose over 10% of earnings. These estimates do not include waste, abuse, fines, investigative and legal fees, or higher insurance premiums. Nor do they capture “soft” costs, e.g., management distraction; lost productivity; talent flight; injured customer and supplier relationships; opportunity loss; and erosion of brand value. The Association of Certified Fraud Examiners Report to the Nations finds that effective antifraud programs cut losses in half, saving most organizations millions of dollars in future losses.